Oxy, Noble and Sunoco close lower

Oil-service stocks dive as natural-gas futures plunge

LisaSanders

DALLAS (CBS.MW) -- With sellers holding the upper hand at the close of trading, quarterly results reported Thursday by Occidental Petroleum, Noble Corp. and Sunoco set the tone for the energy sector.

Occidental
OXY, -1.31%
posted a fourth-quarter profit of $382 million, or 99 cents a share, better than the year earlier $322 million, or 85 cents a share. But the per-share profit for the latest quarter came in 2 cents shy of the average analyst forecast as compiled by Reuters Research.

The oil and chemicals producer saw its quarterly sales rise to $2.37 billion from the prior year's $1.99 billion. Better prices and production from exploration and production accounted for the bulk of Occidental's profit. See full story.

Shares of Los Angeles-based Occidental fell 73 cents to close at $44.27.

In the refiner group, Sunoco
SUN, -0.20%
said net income in the fourth quarter declined to $36 million, or 47 cents a share, from $61 million, or 79 cents, earned in the last three months of 2002.

Sunoco also said it expects to increase capital spending in 2004, with a budget excluding acquisitions of $750 million, up from $425 million in 2003. In 2004, $175 million has been earmarked for spending associated with meeting clean-fuels gasoline specifications.

"Although refining margins declined during the quarter, the market for 2003 was excellent and the outlook for 2004 remains favorable," Sunoco said in a press release. See full story.

Sunoco's shares fell 64 cents to close at $56.07.

More broadly in energy, the Amex Natural Gas Index
XNG, -0.91%
dipped 1.1 percent to close at 225.57.

Within this segment, Burlington Resources
BR, -0.82%
saw its shares fall 22 cents to close at $59.01. Late Wednesday, Burlington said its profit nearly tripled in the fourth quarter, thanks to lower Canadian tax obligations and other one-time events.

In particular, Burlington said it earned $404 million, or $2.04 per share, on revenue of $1.065 billion, up from earnings of $157 million, or 78 cents per share, on revenue of $830 million in the 2002 quarter.

Burlington said its tax benefits and other one-time gains amounted to 88 cents a share. Analysts polled by Thomson First Call had, on average, expected Burlington to earn $1.07 per share and post revenue of $1.033 billion in the latest quarter. See full story.

Elsewhere, oil-service stocks lost ground, as reflected in the Philadelphia Oil Service Index
OSX, -1.06%
which pulled back 1.5 percent to close at 98.88 after a three-session winning streak.

Noble Corp.
NE, -1.86%
dropped 50 cents to close at $36.69 after reporting a 41 percent decrease in fourth-quarter profit on weak drilling demand. See full story.

And on the New York Mercantile Exchange, natural gas fell 5.1 percent to settle at $5.834 per million British thermal units. See Futures Movers.

The Energy Department said U.S. natural-gas stocks fell by 156 billion cubic feet for the week ended Jan. 16, in line with some market expectations, but a number of estimates had called for a decline of as much as 250 billion cubic feet.

Total gas in storage thus stood at 2.258 trillion cubic feet, up 282 billion cubic feet from the year-ago level and 193 billion cubic feet above the five-year U.S. average, the government data showed.

March crude settle at $34.93, up 35 cents.

Meanwhile, the Philadelphia Utility Index
UTY, -0.74%
slipped at the close to finish 314.03. The Merrill Lynch Utilities HOLDRS
UTH, +1.60%
shed 5 cents to close at $80.15.

Also, the CBOE Oil Index
$OIX
was down 0.7 percent to close at 326.81.

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